Bondholders have accepted an amended agreement. After looking completely screwed yesterday due to a failed bond agreement, GM proved, like a phoenix rising out of the ashes, that it still had some fight in them. The company, teetering on bankruptcy, convinced bondholders to agree to a revised plan in which they’d receive a 10 percent equity stake. It may not be enough to save them, but you have to give them high-fives for the effort. source
Let’s pretend everything’s OK, guys! General Motors is trying to calm rattling nerves of workers by assuring them they’ll still get paid in a bankruptcy. So they decided to pay their employees early this week. “This was purely psychological,” said GM spokesman Tom Wilkinson. “Everybody is just very anxious.” We’re sure this will make up for the forthcoming factory shutdowns. source
They failed to convince bondholders to convert their claims to stock. General Motors is a huge company and it’s the kind of company that should just not fail, ever, but unfortunately they may be past the point of no return. The corporation needed to convince 90% of bondholders that their valuable GM bonds could convert to valuable GM stock. Now, running low on options, they will probably run into the June 1 deadline head-first, like a car crashing into a building on purpose. Don’t you love this country? source
Ultimately, I think that GM is going to be a strong company and we are going to be pulling out as soon as the economy recovers and they’ve completed their restructuring.
President Barack Obama • Who did not refer to the likely bankruptcy the company faced to complete that restructuring in his comments on the automaker. *Sigh* he wouldn’t care so much if the company hadn’t been so essential to the last 100 years of our country’s growth. • source